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Management
Group 2
Definition
It covers all aspects of material costs,
materials supply and utilization
All the concerned Depts. – Materials,
Design, Production, Quality, Accounts
etc. have to work in close co-
ordination with each other.
It performs the following functions
Case Study
What to buy
When to buy
Where to buy
How much to buy
How much to pay
How much to stock
Purchase Guidelines
To deal with Approved / Regular Vendors
To follow Quality System procedures as
per ISO 9001- 2000
To evaluate and develop vendors on the
basis of vendor’s background, quality
of products/services and reliability.
To derive maximum cost benefit by :
vConsolidating requirements
vStrategic negotiations
vUsing techniques such as Reverse Auction
Reverse Auction
A reverse auction is a type of auction
in which
the roles of buyers and sellers are
reversed.
Sellers compete to obtain business, and
prices
typically decrease over time.
lowest bid
price is registered.
Inventory Control
Inventory control means keeping track
of your stock
Knowing how much was sold and how much
is left
Let’s you know when to order more fuel
Let’s you keep records of losses and
gains
Gives you consumption rates of high
demand and low demand
Standardization
It is a belief that the market has the
ability to
understand and chart a valid future
direction
through the use of collective wisdom, to
adjust to
that change
Standard
Interoperability
Value Engineering
It is an analysis of function of a
project or a service, performed by
qualified agency or contractor
personnel
It is directed at lowering direct and
life cycle costs, without affecting
performance, reliability, quality and
safety
It seeks to eliminate unnecessary costs,
while maintaining or improving the
functionality of the project
Future